Market and Mortgage News - Week of Sep. 26th, 2011 - Edmonton & Calgary


First Foundation’s Best Rates To Open the Week:

Term Rates
1 Year 2.64%
2 Year 2.49%
3 Year 2.89%
4 Year 2.99%
5 Year 3.29%
7 Year 4.49%
10 Year 4.79%

ARM / Variable 2.60%
Line of Credit 3.50%

Prime Rate 3.00%
Qualifying Rate 5.19%

Rate Pick of the WeekVariable rate at 2.50% for clients comfortable with a certain amount of risk or the 4 year at 2.99% for those preferring the stability of a fixed rate.

Market News

The Toronto stock market surged more than 200 points Monday in its first trading after a wild week that saw global markets plummet on dismal predictions for the U.S. economy and a growing mess in debt-laden European countries.

The S&P/TSX composite index closed up 244.32 points to 11,707.19 following a 7.5 per cent drop last week, as financials recovered on hopes that European finance ministers would take action soon to deal decisively with the government debt crisis that has put banks on the continent under immense pressure.

What Does This Mean For You?

Bank of Canada Governor Mark Carney says that our banks have only modest exposure to the Eurozone and is well protected by it’s capital and liquidity. Our bigger concern is certainly the US and the lack of trade that may occur if things continue to deteriorate there, leading to possible job loss here at home.

Mortgage News

Last week, Stats Canada posted the Consumer Price Index ( CPI) data for August 2011. The CPI rose 3.1%, up from 2.7% in July and core inflation rose 1.9%, which was higher than the 1.6% we saw in July.

What Does This Mean For You?

Inflation is clearly on the rise and we are drawing ever closer to the Bank of Canada’s magic 2% core inflation target that had been touted to be the catalyst for an increase to the key lending rate at long last, however Mark Carney’s comments last week alluded to a different, immediate outcome;

“The (U.S.) housing market remains a mess, the consumer is weak, and government actions can be expected to reduce growth…The U.S. economy is close to stall speed…”

Although Carney would like to give the impression that we operate our monetary policies based on what is happening within our borders rather than without, it’s obvious that an aggressive push to the key lending rate, regardless of our own economic health, would stall the overall global recovery. In short, even though inflation in Canada seems to be ticking along nicely, mortgage rates are not likely to move upward anytime soon in reaction, mainly due to a lack of growth in the US.

Are you a stats lover, like First Foundation’s Project Manager Tracy Hall ?

Check out all the Edmonton sales stats you can gleefully handle over at The Edmonton Real Estate Blog. I’m pretty sure there’s even a full color line graph!

Have a good week!

As the company’s first employee, Jennifer has been a Licensed Mortgage Associate since 2004, but her current role is not focused on mortgages. She is the resident blog writer and…

Learn more about Jennifer Rochford